New and complex results on catalytic activity, thermal stability, effect of H2O and SO2 on the Pd/La2O3-CeO2-Al2O3 model system in methane combustion have been obtained. The catalyst characterization has been made by N2- physisorption, XRD, SEM/EDX, HRTEM, XPS, TPD, TPR and FTIR methods. The observed high activity is related to the stabilization of highly dispersed Pd4+ species, strongly interacting with the support. As it was expected, La2O3 prevented the sintering of the gamma-alumina carrier, in addition it probably contributed to avoid further agglomeration of the palladium species by the formation of La2PdO4 mixed phase. It is supposed that the most probable reason for the observed decrease in activity in the presence of water vapor of thermally aged sample is the increase in PdO/Pd – ratio above its optimum. The presence of both H2O and SO2 in the gas leads to formation of surface Al2(SO4)3, thus indicating a limited possibility to regenerate completely the catalyst. The reaction pathway over Pd/La2O3-CeO2-Al2O3 catalysts proceeds most probably through Mars–van Krevelen mechanism upon adsorption of water molecules on both oxidized and reduced sites and slow desorption of reaction products. For practical evaluation of the synthesized material, a sample of Pd/La2O3-CeO2-Al2O3 was examined as supported on stainless steel (Aluchrom VDM®) in the form of single monolithic channel. Two-dimensional heterogeneous models were used to simulate the methane combustion from laboratory scale up to pilot- and full-scale adiabatic monolithic reactors.